Buy Back of Shares – Corporate and Management Accounting MCQ

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Buy Back of Shares – Corporate and Management Accounting MCQ

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The following information is available from the audited balance sheet of TH Ltd.:

Equity Share Capital (3,000 lakh Shares of ₹ 10 each)

30,000

Securities Premium A/c

3,000

General Reserve

10,000

Secured Loanshttps:

40,000

Unsecured Loans

22,000Compute the maximum limit up to which buy-back is permitted in the financial year 2018-2019.

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Following is the extract of the balance sheet of Tube Ltd.

Equity Shares of ₹ 10 each20,00,000

Securities Premium

4,80,000

15,00,000
Reserves

5,60,000
Profit & Loss Account

Bank

18,20,000

1The company bought back 30,000 shares at ₹ 40 each. The transaction in respect of buyback was financed by the sale of 2/3rd of non-trade investment for ₹ 11,80,000.
0008,40
Non-Trading Investments20

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Following is the extract of the balance sheet of Light Co. Ltd.The company bought back 15,000 shares at ₹ 40 each. The transaction in respect of buy-back was financed by the sale of 2/3rd of non-trade investment for ₹ 5,90,000.Amount to be transferred to capital redemption reserve =?

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ABC Ltd. has paid-up equity capital of 10,00,000 equity shares of ₹ 10 each fully paid-up. The position of reserves is as follows:General Reserve = ₹ 30,00,000Profit & Loss Account = ₹ 2,00,000Securities Premium = ₹ 2,00,000The company decided to buy back 2,00,000 equity shares of ₹ 10 each at 25% premium. For this purpose, the company sold the entire investments at ₹ 12,00,000 (book value ₹ 10,00,000) and made a fresh issue of 10% preference shares of ₹ 100 each to the extent minimum after utilizing the securities premium account and half of the general reserve. How many preference shares must be issued by the company so that provisions of the Companies Act, 2013 get complied with?

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Equity shares amounting to ₹ 2,00,000 are brought back at a premium of 5%, by the issue of preference shares amounting to ₹ 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?

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During the year 2018-2019, T Ltd. buy-back 20,000 equity shares of ₹ 100 each at a premium of 5%. During the year 2018-2019, as the company did not have sufficient cash resources to buy back equity shares, it issued ₹ 1,00,000, 12% Preference shares of ₹ 10 each at a premium of 15%. The company has sufficient balance in general reserve. At the time of buy-back equity shares, the amount to be transferred to capital redemption reserve =?

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S Ltd. decided to buy back 2,000 equity shares of ₹ 100 each at a premium of 10%. For the purpose of redemption, the company issued 15,0 10% Preference shares of ₹ 10 each at a premium of 20%. Company has sufficient balance in Profit & Loss A/c. At the time of buy-back shares, the amount to be transferred by the company to the Capital Redemption Reserve Account =?

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N Ltd. had 90,000 equity shares of ₹ 100 each, fully paid up. The company decided to buy back 10% shares at par by the issue of the sufficient number of preference shares. N Ltd. does not have any reserves.How many preference shares are required to be issued if new preference shares are to be issued at ₹ 10 each?

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The Paid-up equity shares capital of ABC Ltd. is ₹ 50,00,000 having a face value of ₹ 10 each fully paid-up. Other details:General Reserve = ₹ 15,00,000General Reserve = ₹ 15,00,000Capital Redemption Reserve = ₹ 4,00,000Profit & Loss Account = ₹ 1,00,000Statutory reserve = ₹ 6,40,000Securities Premium = ₹ 1,00,000The Board of Directors passed a resolution in a Board meeting to buy back a maximum number of shares as allowed by law. Maximum No. of shares that can be brought back =?

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Which of the following method of buy-back is allowed under the Companies Act, 2013?(I) Buy-back by way of purchasing the securities issued to employees of the company pursuant to a scheme of stock option.(II) Buy-back by way of purchasing the securities issued to employees of the company pursuant to a scheme of sweat equity.

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Which of the following is allowed within the next 6 months after the buyback of share?

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Which of the following is allowed within the next 6 months after the buyback of share?

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Where a company completes a buyback of its shares or other specified securities, it shall not make a further issue of the same kind of shares or other securities including allotment of new shares u/s 62( 1 )(a) [i. e. right issue] or other specified securities within a period of –

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Where a company buys back its own shares or other specified securities, it shall extinguish and physically destroy the shares or securities so bought back within the last date of completion of buy-back.

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As per Section 68(6) of the Companies Act, 2013, declaration of solvency should be verified by an affidavit to the effect that the Board of Directors of the company has made a full inquiry into the affairs of the company as a result of which they have formed an opinion that it is capable of meeting its liabilities and will not be rendered insolvent within a period of_____from the date of the declaration adopted by the Board.

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Declaration of solvency in relation to buyback of shares has to be filed in

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Where a company proposes to buy-back its own shares or other specified securities, it shall, before making such buy-back, file with the ROC and the SEBI, a declaration of solvency signed by –

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Which of the following method of the buyback is allowed under the Companies Act, 2013?(I) Buy-back from the existing shareholders or security holders on a proportionate basis.(II) Buy-back from the promoters of the company only on a selective basis.(Ill) Buy-back from the open market.

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The notice of the meeting at which the special resolution is proposed to be passed relating to buy-back of shares shall be accompanied by an explanatory statement stating

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No offer of buy-back shall be made within a period of reckoned from the date of the closure of the preceding offer of buy-back

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The buy-back of the shares or other specified securities listed on any recognized stock exchange is in accordance with the –

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Companies are allowed to buy back shares which are:

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For the purpose of calculating the debt-equity ratio which of the following debts are considered –

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As per Section 68 of the Companies Act, 2013, the post-buy-back debt-equity ratio should not exceed –

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Buy-back of equity shares in any financial year should not exceed –

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For buy-back up to of the company, Board resolution is sufficient.

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The maximum permissible buy-back under the Companies Act, 2013 is

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No company shall purchase its own shares or other specified securities unless buy-back is authorized by its –

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Provisions of Section 68 relating to buy-back of shares are applicable to –

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Section 68 of the Companies Act, 2013 provides that no buy-back of any kind of shares or other specified securities shall be made out of the

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A company may purchase its own shares or other specified securities out ofA. Free reservesB. Securities premium accountC. Proceeds of issue of any sharesD. Proceeds of issue of specified securities.

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Provisions relating to buying back securities are contained in the Companies Act, 2013.

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